Mumbai, June 29: The Maharashtra State Consumer Disputes Redressal Commission (SCDRC) has partly allowed a consumer complaint filed by Lokhandwala resident Neeta Lalwani, directing HDFC Standard Life Insurance Co. Ltd. to refund the Rs 7 lakh premium paid by her late husband while rejecting her claim for the Rs 70 lakh death benefit under the policy.
The Commission observed, “To allow the insurer to forfeit the entire principal premium under the highly specific and tragic circumstances, where no risk coverage was extended for the subsequent period and the consumer’s family is left entirely unassisted, would amount to a harsh and unconscionable enforcement of a standard-form contract. The Consumer Protection Act is a beneficial piece of legislation designed to balance contractual imbalances. Therefore, we hold that retaining this entire amount without any corresponding risk coverage during the period constitutes an unfair trade practice, and it is only just, proper, and in the interest of natural justice that the principal annualised premium of Rs 7,00,000 be refunded to the widow of the deceased.”
The order was passed by the Bench comprising Presiding Member Poonam V. Maharshi and Member Dr Nisha Amol Chavhan.
Policy Lapsed Before Death
According to the complaint, Neeta Lalwani’s husband, Vinod Lalwani, had purchased an HDFC Life Classic Assure Plus policy in October 2015 by paying an annual premium of Rs 7 lakh. The second premium, due on October 3, 2016, was not paid. In June 2017, the insurer sent an email stating that Rs 7.41 lakh was payable and that the quoted amount was valid until July 5, 2017. Vinod Lalwani died on July 4, 2017, a day before the quoted validity expired.
Following his death, the insurer repudiated the widow’s claim on the ground that the policy had lapsed with effect from October 3, 2016, due to non-payment of the renewal premium.
The complainant argued that the insurer’s email created an impression that the policy continued to remain effective until July 5, 2017, and sought payment of the minimum assured death benefit of Rs 70 lakh. In the alternative, she sought a refund of the premium amount along with compensation.
Commission Rejects Death Claim
The insurer contended that the policy had automatically lapsed after the expiry of the grace period and that the June 2017 email merely communicated the amount required to revive the lapsed policy in accordance with the applicable regulatory provisions. Since the revival process was never completed before the insured’s death, it argued that no death benefit was payable.
The Commission accepted the insurer’s contention that the policy was not in force on the date of the insured’s death. It held that the email did not extend the insurance cover but merely specified the amount payable for the revival of the lapsed policy.
As the insured neither paid the outstanding premium nor completed the revival process before his death, the policy remained lapsed and the insurer was justified in repudiating the death claim.
However, the Commission held that permitting the insurer to retain the entire Rs 7 lakh premium in the peculiar facts of the case would result in unjust enrichment. It noted that although the policy had lapsed, the insurer had retained a substantial premium while simultaneously keeping the revival window open until July 5, 2017, which the insured missed by a day due to his death.
Also Watch:
Refund Ordered Within 45 Days
Holding that consumer law seeks to balance contractual terms with fairness and equity, the Commission directed HDFC Standard Life Insurance and its branch office to jointly and severally refund the Rs 7 lakh premium to the complainant within 45 days.
In the event of default, the amount will carry interest at the rate of 9 per cent per annum from the expiry of the 45-day period until realisation.
The Commission, however, rejected the complainant’s claim for the Rs 70 lakh death benefit.
To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/
